Tenn. Code Ann. § 48-249-101 Short title.
48-249-101. Short title.
This chapter shall be known and may be cited as the “Tennessee Revised Limited Liability Company Act.”
Acts 2005, ch. 286, § 1.
General Provisions
Tenn. Code Ann. tit. 48, ch. 249, pt. 1
in effectTenn. Code Ann. § 48-249-102 Chapter definitions.
48-249-102. Chapter definitions.
As used in this chapter, unless the context otherwise requires:
(1) “Annual report” means the form required by § 48-249-1017;
(2) “Articles” or “articles of organization” means, in the case of an LLC, articles of organization or, to the extent applicable with respect to an LLC initially formed under and governed by the Tennessee Limited Liability Company Act, compiled in chapters 201-248 of this title, articles of conversion, taken together with all of the following, to the extent they modify, correct, restate or otherwise affect the articles of organization or articles of conversion: articles of amendment, articles of correction, certificates of merger and all documents required to be filed with any of the articles of amendment, articles of correction and certificates of merger, as part of the formation and continuation of an LLC. In the case of a foreign LLC, “articles” or “articles of organization” means all documents serving a similar function required to be filed with the secretary of state or other state office of the foreign LLC's jurisdiction of formation;
(3) “Business” means every trade, occupation, profession, investment activity, and other lawful purpose for gain or the preservation of assets, whether or not carried on for profit;
(4) “Code” means the Internal Revenue Code of 1986 (26 U.S.C.), including all successor provisions to the sections referenced in this chapter;
(5) “Confirmation of good standing” means confirmation by the commissioner of revenue issued through electronic communication to the secretary of state or a certificate of tax clearance that at the time such confirmation is issued an LLC or a foreign LLC is current on all taxes and penalties to the satisfaction of the commissioner;
(6) “Director” means an individual who is vested with authority as a director under § 48-249-401(c);
(7) “Director-managed LLC” means an LLC that is so designated in its articles;
(8) “Distribution” means a direct or indirect transfer of money or other property by an LLC, except for the issuance of its own membership interests or financial rights, with or without consideration, or an incurrence or issuance of indebtedness, whether directly or indirectly, including through a guaranty, to or for the benefit of any of its members or holders of financial rights, as applicable, in respect of membership interests or financial rights. A distribution may be in the form of an interim distribution under § 48-249-305 or a liquidation distribution under § 48-249-620; of a purchase, redemption, or other acquisition of its membership interests or financial rights; of a distribution of indebtedness, which includes the incurrence of indebtedness, whether directly or indirectly, including through a guaranty, for the benefit of the LLC's members or holders of financial rights, as applicable; or of any other transaction. “Distribution” does not mean amounts paid to or for the benefit of members, or holders of financial rights as compensation or benefits for services rendered by them in their capacities as members, holders, officers, managers, directors or agents;
(9) “Entity” means, whether foreign or domestic and whether for profit or not-for-profit, limited liability companies, corporations, unincorporated associations, real estate investment trusts, statutory or business trusts or associations, estates, general partnerships, limited partnerships, registered or unregistered limited liability partnerships, limited liability limited partnerships or similar organizations, trusts, joint ventures, two (2) or more persons having a joint or common economic interest, and local, municipal, state, United States and foreign governments;
(10)(A) “Family LLC” means an LLC in which, at the relevant time, members of the same family hold, in the aggregate, whether as members or holders of financial rights, at least fifty percent (50%) of the financial rights in the LLC. “Members of the same family,” as used in this subdivision (10) means two (2) or more individuals as to one (1) of whom, referred to as the “common relative,” each of the others bears one (1) of the following relationships:
(i) A spouse or former spouse of the common relative;
(ii) An ancestor or lineal descendant of the common relative;
(iii) An ancestor of the spouse or former spouse of the common relative;
(iv) A brother or sister of the common relative;
(v) A lineal descendant of any individual described in subdivision (10)(A)(iv);
(vi) A spouse or former spouse of any individual described in subdivisions (10)(A)(ii)-(v);
(vii) A lineal descendant of any individual described in subdivision (10)(A)(vi);
(B)(i) For the purpose of determining “members of the same family”:
(a) Relationship by adoption shall be treated the same as relationship by blood;
(b) Financial rights held by any entity that is related, within the meaning of §§ 267(b) and 707(b) of the Code (26 U.S.C. §§ 267(b) and 707(b)), respectively, to any individual shall be deemed to be held by such individual;
(c) The common relative need not be a member of or holder of financial rights in the LLC; and
(d) The common relative need not be living, but, if deceased, may not be more than four (4) generations removed from the youngest generation of individuals who would, but for this subdivision (10)(B)(i), be members of the same family;
(ii) For purposes of the proviso in subdivision (10)(B)(i)(d), a spouse, or former spouse, shall be treated as being of the same generation as the individual to whom such spouse is, or was, married;
(iii) For purposes of this subdivision (10), the word “fiduciary,” as used in § 267(b) of the Code, shall be treated as a trust and an entity;
(11) “Financial rights” means a member's or holder's rights to:
(A) Share in profits and losses, as provided in § 48-249-304;
(B) Share in and receive distributions, as provided in § 48-249-305;
(C) Receive liquidation distributions, as provided in § 48-249-620; and
(D) Transfer the financial rights described in subdivisions (11)(A)-(C), as provided in § 48-249-507;
(12) “Foreign LLC,” or an LLC that is designated as “foreign,” means a limited liability company that is formed under the laws of a jurisdiction other than this state;
(13) “Governance rights” means a member's right to vote on one (1) or more matters, all of a member's other rights as a member in the LLC under the LLC documents or this chapter, other than financial rights, and the right to transfer the voting and other rights described in this subdivision (13);
(14) “Holder of financial rights” or “holder” means a person, other than a member, owning any financial rights in an LLC. A holder of financial rights may acquire its financial rights, either by transfer of ownership from a member or other holder, or directly from the LLC;
(15) “LLC,” sometimes referred to as a “domestic LLC” or an LLC that is designated as “domestic,” means a limited liability company formed under this chapter, or a limited liability company formed under the Tennessee Limited Liability Company Act, compiled in chapters 201-248 of this title, that has elected to be governed by this chapter, or, where expressly indicated, a limited liability company formed under and governed by the Tennessee Limited Liability Company Act;
(16) “LLC documents” means either, or both:
(A) An LLC's articles; and
(B) If the LLC has an operating agreement, whether written or oral, its operating agreement;
(17) “Majority vote” means, with respect to a vote of the members, managers, or directors, as applicable:
(A) If voting on a per capita basis, a majority in number of the members, managers or directors, as applicable, entitled to vote on a specific matter; or
(B) If voting is determined otherwise under the LLC documents, a majority in voting interest of the members, managers or directors, as applicable, entitled to vote on a specific matter, as determined under the LLC documents;
(18) “Manager” means a person who is vested with authority as a manager under § 48-249-401(b);
(19) “Manager-managed LLC” means an LLC that is so designated in its articles;
(20) “Member” means a person that has been admitted to an LLC as a member, as provided in § 48-249-501. With respect to a foreign LLC, “member” means a person recognized as a member of the foreign LLC, under the laws of the jurisdiction of formation of the foreign LLC;
(21) “Member-managed LLC” means an LLC that is so designated in its articles;
(22) “Membership interest” means a member's interest in an LLC, which shall consist of the member's financial rights and governance rights;
(23) “Officer” means an individual, who is vested with authority as an officer under § 48-249-401(e);
(24) “Operating agreement” means an agreement described in § 48-249-203(a);
(25) “Person” means an individual or an entity;
(26) “Personal representative” means, as to an individual, the executor, administrator, guardian, conservator, trustee or other legal representative of the individual, and, as to an entity, the legal representative or successor of the entity;
(27) “Principal executive office” means the office, in or out of this state, that is designated as the principal executive office of a domestic or foreign LLC in its articles or in an application for a certificate of authority, as applicable, as thereafter changed from time to time in accordance with this chapter;
(28) “Proceeding” means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal;
(29) “Professional limited liability company,” “professional LLC” or “PLLC” has the meaning set forth in § 48-249-1102;
(30) “Record” means information that is inscribed in a tangible medium, or that is stored in an electronic or other medium, and is retrievable in perceivable form;
(31) “Registered agent” means the person designated as the registered agent of a domestic or foreign LLC in its articles or in an application for a certificate of authority, as applicable, as thereafter changed from time to time in accordance with this chapter;
(32) “Registered office” means the office in this state that is designated as the registered office of a domestic or foreign LLC in its articles or in an application for a certificate of authority, as applicable, as thereafter changed from time to time in accordance with this chapter;
(33) “Representative” means, as to a foreign LLC, a director, manager, officer, employee or other agent of a foreign LLC;
(34) “Secretary of state” means the individual who holds the office of secretary of state of this state;
(35) “State,” when referring to a part of the United States other than this state, means a state, a commonwealth, the District of Columbia and a territory and insular possession of the United States, and their respective agencies and governmental subdivisions;
(36) “Tax clearance for termination or withdrawal” means confirmation by the commissioner of revenue issued through electronic communication to the secretary of state or a certificate of tax clearance that an LLC or a foreign LLC has filed all applicable reports, including, but not limited to, a final report, and has paid all fees, penalties, and taxes as required by the revenue laws of this state; and
(37) “Transfer” means an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift and transfer by operation of law.
Acts 2005, ch. 286, § 1; 2006, ch. 620, §§ 11–15; 2010, ch. 741, § 37; 2011, ch. 99, §§ 11-13.
Tenn. Code Ann. § 48-249-103 Notice.
48-249-103. Notice.
(a) General; Methods of notice. Notice under this chapter or under the LLC documents, to an LLC or to a foreign LLC authorized to transact business in this state, or by an LLC to its managers, directors, officers, employees, agents, members and holders of financial rights, as applicable, shall be in writing, except that oral notice is effective, if it is reasonable under the circumstances. Such notice may be communicated to or by an LLC, or to a foreign LLC, in person; by telephone, telegraph, teletype, electronic mail or other form of wire or wireless communication; or by mail or private carrier. If these forms of personal notice are impracticable, notice may be communicated by publication in a newspaper of general circulation, or by radio, television or other form of public broadcast communication, published or broadcast in the county where the principal executive office of the LLC is or was last located, or in such other geographic areas as may be required under the LLC documents.
(b) Effectiveness of notice. Written notice by a domestic LLC to its managers, directors, officers, employees, agents, members and holders of financial rights, as applicable, if in a comprehensible form, is effective when mailed, if mailed postpaid and correctly addressed to the recipient's address shown in the LLC's current records.
(c) Notice to LLC. Written notice to a domestic LLC, or a foreign LLC authorized to transact business in this state, may be addressed to its registered agent at its registered office or to the domestic or foreign LLC or its secretary, if any, at its principal executive office (or to a designated mailing address such as a post office box if the United States postal service does not deliver to the principal executive office).
(d) General effectiveness of written notice. Except as provided in subsection (b), written notice, if in a comprehensible form, is effective at the earliest of the following:
(1) When received;
(2) Five (5) days after its deposit in the United States mail, if mailed correctly addressed and with first class postage affixed;
(3) On the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee; or
(4) Twenty (20) days after its deposit in the United States mail, as evidenced by the postmark if mailed correctly addressed, and with other than first class, registered or certified postage affixed.
(e) Oral notice. Oral notice is effective when communicated, if communicated in a comprehensible manner.
(f) Notice by publication or broadcast. Notice by publication or public broadcast, as provided in subsection (a), is effective upon publication or broadcast, as applicable.
(g) Governing requirements. Notwithstanding this section, if another provision of this chapter prescribes notice requirements for particular circumstances, those requirements shall govern.
Acts 2005, ch. 286, § 1; 2014, ch. 783, § 12.
Tenn. Code Ann. § 48-249-104 Purposes and powers.
48-249-104. Purposes and powers.
(a) Any lawful purpose. Every LLC has the purpose of engaging in any lawful business, unless a more limited purpose is set forth in its LLC documents.
(b) Regulation by another statute. An LLC engaging in a business that is subject to regulation under another statute of this state may form under or elect to be governed by this chapter, only to the extent not prohibited by, and subject to any limitations of, the other statute.
(c) General powers. An LLC has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including, without limitation, power to:
(1) Sue and be sued, complain and defend in the LLC's name;
(2) Make and amend an operating agreement with its members, not inconsistent with its articles or with the laws of this state, for managing the business and regulating the affairs of the LLC;
(3) Purchase, receive, lease or otherwise acquire, own, hold, improve, use, and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located;
(4) Sell, convey, mortgage, pledge, lease, exchange and otherwise dispose of, or grant a security interest in, all or any part of its property;
(5) Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, or grant a security interest in, and deal in and with shares or other interests in, or obligations of, any other entity;
(6) Make contracts, including without limitation, contracts of guaranty and suretyship, incur liabilities, borrow money, issue its notes, bonds, and other obligations, which may be convertible into or include the option to purchase other rights or securities of, or other interests in, the LLC, and secure any of its obligations or those of any other person by mortgage, pledge of, or security interest in, any of its property;
(7) Lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment;
(8) Be a promoter, partner, member, shareholder, associate, trustee or manager of any partnership, joint venture, trust or other entity;
(9) Conduct its business, locate offices and exercise the powers granted by this chapter, within or without this state;
(10) Elect or appoint directors, managers, officers, employees, and agents of the LLC, as applicable, define their duties, fix their compensation, lend them money and credit, and guarantee debt, or act as surety on their behalf;
(11) Pay pensions and establish pension plans, pension trusts, profit-sharing plans and retirement or welfare benefit or incentive plans, for any or all of the current or former members, directors, managers, officers, employees and agents of the LLC, or any of its affiliates;
(12) Make donations for the public welfare or for charitable, scientific or educational purposes;
(13) Make payments or donations, or do any other act not inconsistent with law, that furthers the business and affairs of the LLC;
(14) Procure, for its benefit, insurance on the life of any of its existing members, holders, directors, managers, officers or employees or other agents for any lawful purpose, including, without limitation, for the purpose of acquiring, at a member's or holder's death, the membership interest or financial rights owned by such member or holder of financial rights, as applicable, and to continue any such insurance after the LLC's relationship with the insured terminates;
(15) Accept gifts, devises and bequests, subject to any conditions or limitations contained in such gift, devise or bequest, so long as such conditions or limitations are not contrary to any provisions of this chapter, or the purposes for which the LLC is formed;
(16) Accept contributions under § 48-249-301; and
(17) Have and exercise all other powers necessary or convenient to effect any or all of the purposes for which the LLC is formed.
Acts 2005, ch. 286, § 1.
Tenn. Code Ann. § 48-249-105 Ultra vires actions.
48-249-105. Ultra vires actions.
(a) Limit on power to challenge. Except as provided in subsection (b), the validity of an LLC's action may not be challenged on the ground that the LLC lacks or lacked the power to act.
(b) Challenge of power. An LLC's power to act may be challenged in a proceeding by:
(1) A member against the LLC to enjoin the act;
(2) The LLC, directly, derivatively or through a receiver, trustee or other personal representative, against an incumbent or former director, manager, employee, agent or member of the LLC, as applicable; or
(3) The attorney general and reporter under § 48-249-617.
(c) Derivative action. In a member's proceeding, under subdivision (b)(1), to enjoin an unauthorized LLC act, the court may enjoin or set aside the act, if equitable, and if all affected persons are parties to the proceeding, and may award damages for loss suffered by the LLC or another party because of enjoining the unauthorized act.
Acts 2005, ch. 286, § 1.
Tenn. Code Ann. § 48-249-106 LLC name.
48-249-106. LLC name.
(a) Name requirements. An LLC name and, to the extent required by this section and § 48-249-903, a foreign LLC name:
(1) Shall contain the words “limited liability company,” the abbreviation “L.L.C.” or “LLC,” or words or abbreviations of like import in another language; provided, that they are written in roman characters or letters; and provided, further, that, in the case of a foreign LLC, the name may contain, in lieu of the provisions of this subdivision (a)(1), the designations allowed by the jurisdiction in which the foreign LLC was formed. A PLLC formed under part 11 of this chapter shall contain the words or the abbreviation as required by § 48-249-1108. Notwithstanding this subdivision (a)(1), the name of an LLC or foreign LLC shall not contain the word “corporation” or “incorporated,” or an abbreviation of either or both of these words; and
(2) May not contain language stating or implying that the domestic or foreign LLC:
(A) Transacts or has the power to transact any business for which authorization, in whatever form and however denominated, is required under the laws of this state, unless the appropriate commission or official has granted such authorization and certifies that fact to the secretary of state in writing;
(B) Is formed as, affiliated with or sponsored by, any fraternal, veterans', service, religious, charitable or professional organization, unless the formation, affiliation or sponsorship is certified in writing to the secretary of state by the body authorizing the formation or the organization with which affiliation or sponsorship is claimed, as applicable;
(C) Is an agency or instrumentality of, affiliated with or sponsored by the United States or any state, subdivision or agency of the United States, unless such fact is certified in writing to the secretary of state by the appropriate official of the United States or the state, subdivision or agency, as applicable; or
(D) Is formed for a purpose other than that permitted by § 48-249-104 and its LLC documents, or, in the case of a foreign LLC, its similar formation and operating documents.
(b) Name shall be distinguishable. Except as authorized by subsection (c), the name of a domestic LLC, and the name of a foreign LLC that is authorized to transact business in this state or is applying for a certificate of authority to transact business in this state, shall be distinguishable upon the records of the secretary of state from the respective names of or for every other entity, whether true, assumed, reserved or registered, to the extent the use or reservation of such names is evidenced by a filing with the secretary of state under applicable law.
(c) Indistinguishable name of entity under common control. A domestic or foreign LLC, or person acting on behalf of an LLC not yet formed, may apply to the secretary of state for authorization to use a name that is not distinguishable upon the secretary of state's records from one (1) or more of the names described in subsection (b). The secretary of state shall authorize use of the indistinguishable name applied for, if:
(1) The person holding the right to use the previously filed name described in subsection (b) consents to the use in writing and submits an undertaking, in a form satisfactory to the secretary of state, to cancel its reservation of such name or change such name to a name that is distinguishable upon the records of the secretary of state from the name of the applicant;
(2) The applicant delivers to the secretary of state a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant's right to use the name applied for in this state; or
(3) The person holding the right to use the previously filed name described in subsection (b) consents in writing to the use of such name by the applicant, and both the other person and the applicant consent in a form satisfactory to the secretary of state to use the same registered agent.
(d) Assumed name.
(1) A domestic LLC, or a foreign LLC authorized to transact business or applying for a certificate of authority to transact business in this state, may elect to adopt an assumed name that complies with the requirements of subsections (a)-(c), except that the assumed name need not contain the designations contained in subdivision (a)(1).
(2) As used in this chapter, the “assumed name” of a domestic or foreign LLC means any name used by the LLC, other than the LLC's true name, except that the following shall not constitute the use of an assumed name:
(A) The identification by a domestic or foreign LLC of its business with a trademark or service mark of which it is the owner or licensed user; and
(B) The use of a name of a division, not separately formed and not containing the words “limited liability company” or an abbreviation of such words; provided, that the domestic or foreign LLC's name is also clearly disclosed with the division name.
(3) Before transacting any business in this state under an assumed name or names, the domestic or foreign LLC shall, for each assumed name, execute and file, in accordance with §§ 48-249-1005 and 48-249-1007 an application setting forth:
(A) The true name of the applicant;
(B) The jurisdiction in which the applicant is formed;
(C) The applicant's intention to transact business under an assumed name; and
(D) The assumed name that the applicant proposes to use.
(4) The right to use an assumed name shall be effective for five (5) years from the date of filing with the secretary of state.
(5) A domestic or foreign LLC may renew the right to use its assumed name or names, if any, for successive five-year periods, by filing an application to renew the assumed name or names and paying the renewal fee as prescribed by § 48-249-1007(a), within the two (2) months preceding the expiration of the then current period.
(e) Cancellation or change of assumed name. Any domestic or foreign LLC may change or cancel any or all of its assumed names, by filing, in accordance with §§ 48-249-1005 and 48-249-1007, an application setting forth:
(1) The true name of the applicant;
(2) The jurisdiction in which the applicant is formed;
(3) The applicant's intention to cease transacting business in this state under the specified assumed name, by changing or canceling the assumed name;
(4) The assumed name to be changed or cancelled; and
(5) If the assumed name is to be changed, the new assumed name that the applicant proposes to use.
(f) Use of changed name. Upon the filing of an application to change an assumed name, the applicant shall have the right to use the new assumed name for a new five-year period, subject to the same renewal procedures authorized by subsection (d).
(g) Cancellation of assumed name by secretary of state. The right of a domestic or foreign LLC to use an assumed name shall be cancelled by the secretary of state, if:
(1) The domestic or foreign LLC fails to renew its right to use the assumed name before the right expires;
(2) The domestic or foreign LLC has filed an application to change the assumed name, or to cancel its right to use the assumed name;
(3) In the case of a domestic LLC, the LLC has been dissolved; or
(4) In the case of a foreign LLC, the foreign LLC has had its certificate of authority to transact business in this state revoked.
(h) Unfair competition. Nothing in this section, or in §§ 48-249-107 or 48-249-108, shall abrogate or limit the law as to unfair competition or unfair trade practice, or derogate from the common law, the principles of equity or the statutes of this state, or of the United States, with respect to the right to acquire and protect trade names, trademarks and service marks.
(i) Limited liability. A domestic or foreign LLC acting under an assumed name or registered name shall be deemed to have given notice to all third parties that it is a domestic or foreign LLC, as applicable, and its members, managers, directors, officers and agents shall have the same limitations on liability as if the domestic or foreign LLC operated under its true name.
Acts 2005, ch. 286, § 1; 2006, ch. 620, § 16.
Tenn. Code Ann. § 48-249-107 Reserved name.
48-249-107. Reserved name.
(a) Reserving a name. A person may reserve the exclusive right to use a name for a domestic or foreign LLC, including an assumed name, by filing an application with the secretary of state. The application shall set forth the name and address of the applicant and the name proposed to be reserved. If the secretary of state finds that the name applied for meets the requirements of § 48-249-106 and is available, the secretary of state shall reserve the name for the applicant's exclusive use for a four-month period. Upon the expiration of the four-month period, the same party, or any other party, may apply to reserve the same name.
(b) Transfer of reserved name. The person holding the right to use a name reserved under this section, including an assumed name, may transfer the reservation to another person by filing a notice of the transfer with the secretary of state, signed by the person holding the right to use the reserved name, that states the reserved name being transferred and the name and address of the transferee.
(c) Cancellation of reserved name. The reservation of a specific name may be cancelled by filing a notice with the secretary of state, executed by the person holding the right to use the reserved name, specifying the reserved name being cancelled and the name and address of the person holding the right to use the reserved name.
Acts 2005, ch. 286, § 1.
Tenn. Code Ann. § 48-249-108 Registered name.
48-249-108. Registered name.
(a) Name registration. A foreign LLC may register its name, an assumed name under which it transacts business, or its name with any addition under § 48-249-106(a), if the name is distinguishable upon the records of the secretary of state, as required by § 48-249-106(b).
(b) Process for name registration. A foreign LLC may register its name, its assumed name, or its name with any addition under § 48-249-106(a), by filing an application with the secretary of state:
(1) Setting forth the applicant's name, its assumed name, or its name with any addition under § 48-249-106(a) and the jurisdiction of its formation; and
(2) Accompanied by a certificate of existence, or a document of similar import, from the jurisdiction of formation, bearing a date that is not more than one (1) month prior to the date the application is filed with the secretary of state.
(c) Effective date of registration. The name is registered for the applicant's exclusive use upon the effective date of the application, and until the end of the calendar year in which the registration occurs.
(d) Renewal of registered name. A foreign LLC for which a name registration is effective may renew the registered name for successive years, by filing a renewal application with the secretary of state that complies with the requirements of subsection (b), between October 1 and December 31 of the year prior to the year for which the renewal will be effective.
(e) Use of registered name. A foreign LLC for which a name registration is effective may apply for authority to transact business in this state as a foreign LLC under that name, or consent in writing to the use of that name by a domestic LLC, or another foreign LLC authorized or applying for authority to transact business in this state. The registration terminates when the foreign LLC becomes authorized to transact business in this state, or when the consent to the use of the registered name becomes effective.
Acts 2005, ch. 286, § 1; 2006, ch. 620, §§ 17, 18.
Tenn. Code Ann. § 48-249-109 Registered office and registered agent.
48-249-109. Registered office and registered agent.
(a) Registered office and agent. Each domestic and foreign LLC shall continuously maintain in this state:
(1) A registered office, which may be the same as any of its places of business; and
(2) A registered agent who maintains an office at the same street address as the registered office, and who may be:
(A) An individual who resides in this state, a domestic corporation, a not-for-profit domestic corporation, a domestic LLC, a domestic general partnership, a domestic limited partnership, or a domestic registered limited liability partnership; or
(B) A foreign corporation, a not-for-profit foreign corporation, a foreign LLC, a foreign general partnership, a foreign limited partnership, or a foreign registered limited liability partnership that is authorized to transact business in this state.
(b) New registered agent required. If a registered agent resigns or is unable to perform the required duties, the affected domestic or foreign LLC shall promptly designate another registered agent, to the end that each domestic LLC and each foreign LLC authorized to transact business in this state shall at all times have a registered agent in this state.
Acts 2005, ch. 286, § 1; 2023, ch. 102, § 6.
Tenn. Code Ann. § 48-249-110 Change of registered office or registered agent.
48-249-110. Change of registered office or registered agent.
(a) Change in registered office or agent by LLC. A domestic or foreign LLC may change its registered office or registered agent by filing a statement of change with the secretary of state that sets forth:
(1) The name of the domestic or foreign LLC;
(2) If the current registered office is to be changed, the street address of the new registered office, including the zip code, and the county in which the office is located;
(3) If the current registered agent is to be changed, the name of the new registered agent; and
(4) A statement that, after the change or changes are made, the street addresses of the registered office and the business office of its registered agent will be identical.
(b) Change in registered office by registered agent. If a registered agent changes the street address of such registered agent's business office, the registered agent may change the street address of the registered office of any domestic or foreign LLC for which the registered agent is the registered agent, by notifying the affected domestic or foreign LLC in writing of the change, and by signing, either manually or by facsimile, and by filing a statement with the secretary of state that complies with the requirements of subsection (a), and that recites that the affected domestic or foreign LLC has been notified of the change.
Acts 2005, ch. 286, § 1.
Tenn. Code Ann. § 48-249-111 Resignation of registered agent.
48-249-111. Resignation of registered agent.
(a) Resignation of registered agent. A registered agent of a domestic or foreign LLC may resign the appointment, by filing a statement of resignation with the secretary of state, signed by the registered agent, that includes a certification that the agent has mailed written notice of the registered agent's resignation to the principal executive office of the affected domestic or foreign LLC by certified mail. The statement may indicate that the registered office is also discontinued.
(b) Effective date of resignation. The agency appointment is terminated, and the registered office discontinued, if so provided, on the date on which the statement described in subsection (a) is filed with the secretary of state.
Acts 2005, ch. 286, § 1; 2025, ch. 97, § 7.
Tenn. Code Ann. § 48-249-112 Service on LLC.
48-249-112. Service on LLC.
(a) Agent for service of process. A domestic or foreign LLC's registered agent is the agent for the domestic or foreign LLC for service of process, notice or demand, required or permitted by law to be served on the domestic or foreign LLC.
(b) Secretary of state is default agent. Whenever a domestic or foreign LLC authorized to transact business in this state fails to appoint or maintain a registered agent in this state, whenever the registered agent of a domestic or foreign LLC cannot be found with reasonable diligence, whenever a foreign LLC transacts business or conducts affairs in this state without first obtaining a certificate of authority from the secretary of state, or whenever the certificate of authority of a foreign LLC has been cancelled or revoked, then the secretary of state shall be an agent of such LLC upon whom any process, notice or demand may be served.
(c) Special agent for workers' compensation. Whenever a domestic or foreign LLC authorized to transact business in this state is an employer, within the meaning of the Workers' Compensation Law, compiled in title 50, chapter 6, and the domestic or foreign LLC is, for the purpose of the Workers' Compensation Law, self-insured or a part of a self-insurance pool as provided in title 50, chapter 6, part 4, the domestic or foreign LLC shall, for workers' compensation actions only, be required to appoint the commissioner of commerce and insurance and such commissioner's chief deputy, or their successors, as its true and lawful attorneys upon either of whom all lawful process in any workers' compensation action or legal proceeding against it may be served, as is required of insurance companies by § 56-2-103.
(d) Not exclusive means of service. This section does not prescribe the only means, or necessarily the required means, of service on a domestic or foreign LLC.
Acts 2005, ch. 286, § 1; 2006, ch. 620, § 19.
Tenn. Code Ann. § 48-249-113 Procedure for service on domestic or foreign LLC by service on secretary of state.
48-249-113. Procedure for service on domestic or foreign LLC by service on secretary of state.
(a) Service on secretary of state. When the secretary of state is an agent for a domestic or foreign LLC, as provided in § 48-249-112(b), service on the secretary of state of any process, notice or demand shall be made by delivering the original and one (1) copy of such process, notice or demand to the office of the secretary of state, duly certified by the appropriate official, together with the proper fee. A statement that identifies which of the grounds, as listed in § 48-249-112(b), for service on the secretary of state is applicable shall be included. The office of the secretary of state shall endorse the time of receipt upon the original and copy, and shall immediately send the copy, along with a written notice that service of the original also was made, by registered or certified mail, with return receipt requested, addressed to the domestic or foreign LLC at its registered office or principal office (or designated alternative mailing address) as shown in the records on file in the secretary of state's office, or as shown in the official registry of the state or country in which the foreign LLC is formed. The secretary of state may require the person seeking to serve the process, notice or demand, or the person's attorney, if any, to furnish the latter address.
(b) Refusal of service ineffective. The refusal or failure of the domestic or foreign LLC to accept delivery of the registered or certified mail provided for in subsection (a), or the refusal or failure to sign the return receipt, shall not affect the validity of the service. Any domestic or foreign LLC refusing or failing to accept delivery of such registered or certified mail shall be charged with knowledge of the contents of any process, notice or demand contained in the registered or certified mail.
(c) Receipt received by secretary of state. When the registered or certified mail return receipt is received by the office of the secretary of state, or when a domestic or foreign LLC refuses or fails to accept delivery of the registered or certified mail, and it is returned to the office of the secretary of state, the office of the secretary of state shall forward the receipt or such refused or undelivered mail to the clerk of the court in which the proceeding is pending, or other appropriate official or person, together with the original process, notice or demand, a copy of the notice the secretary of state sent to the defendant LLC and the secretary of state's affidavit setting forth the secretary of state's compliance with this section. Service made under this section shall have the same legal force and validity as if the service had been made personally in this state.
(d) Subsequent pleadings. Subsequent pleadings or papers permitted or required to be served on a domestic or foreign LLC may be served on the secretary of state as agent for the domestic or foreign LLC in the same manner, at the same cost and with the same effect, as process, notice or demand is served on the secretary of state as agent for the domestic or foreign LLC under this section.
(e) Minimum time for appearance. No appearance shall be required in the proceeding by the domestic or foreign LLC on which service is completed under this section, nor shall any judgment be taken against such domestic LLC in less than one (1) month after the date service is completed under this section.
(f) Record retained. The secretary of state shall keep a record of all processes, notices, demands and subsequent pleadings or papers served upon the secretary of state under this section, which record shall include the time of each service and the secretary of state's action with reference to the service.
Acts 2005, ch. 286, § 1; 2014, ch. 783, § 13.
Tenn. Code Ann. § 48-249-114 Personal liability.
48-249-114. Personal liability.
(a) Limited liability rule.
(1) Except as provided in subsections (d) and (f):
(A) The debts, obligations and liabilities of an LLC, whether arising in contract, tort or otherwise, are solely the debts, obligations and liabilities of the LLC;
(B) A member, holder, director, manager, officer, employee or other agent of an LLC does not have any personal obligation, and is not otherwise personally liable, for the acts, debts, liabilities or obligations of the LLC; and
(C) A member, holder, director, manager, officer, employee or other agent of an LLC does not have any personal obligation, and is not otherwise personally liable, for the acts or omissions of any other member, holder, manager, officer, director, employee or other agent of the LLC.
(2) Notwithstanding subdivisions (a)(1)(B) and (C), a member, holder of financial rights, director, manager, officer, employee or other agent may be personally liable by reason of such person's own acts or omissions.
(b) Limited liability after dissolution. The limitation on liability described in subsection (a) continues in full force, regardless of any dissolution, winding up or termination of an LLC.
(c) Member not a proper party to proceeding. A member, holder, director, manager, officer, employee or other agent of an LLC is not a proper party to a proceeding by or against an LLC, except:
(1) Where the object of the proceeding is to enforce such person's right against, or liability to, the LLC;
(2) In a derivative proceeding brought under this chapter or the LLC documents; or
(3) Where the proceeding asserts personal liability of such person, as described in subsection (a).
(d) Sales tax liability. Notwithstanding any other provision of this chapter to the contrary, each member, manager, director, officer, employee, agent or other person required to collect, truthfully account for and pay over to the department of revenue any tax collected from the customers of a domestic or foreign LLC shall be personally liable for those taxes, in the same manner as responsible persons of a corporation under § 67-1-1443.
(e) Failure to follow formalities not to generate personal liability. The failure of a domestic or foreign LLC to observe the usual entity formalities or requirements relating to the exercise of its powers or management of its business is not a ground for imposing personal liability on the members, holders, managers, directors, officers, employees or other agents of the domestic or foreign LLC.
(f) Voluntary unlimited liability.
(1) Notwithstanding anything to the contrary in this section, the articles may provide that one (1) or more specifically identified members, as named in the articles, will be personally liable for all of the debts, obligations and liabilities of the LLC. If that provision is made, each such specifically identified member shall be liable to the same extent as a general partner in a general partnership; provided, that:
(A) In order to be effective, each member so identified shall sign the articles or an amendment to the articles containing this provision; and
(B) Each member identified in the articles shall continue to be personally liable for debts, obligations and liabilities of the LLC until the articles are amended to delete the member's name, but, except as provided in subdivision (f)(2), the amendment shall be signed by a person authorized to bind the LLC under § 48-249-402, and by any remaining members who continue to be identified in the articles as being personally liable for the debts, obligations and liabilities of the LLC.
(2) A member who is identified in the articles as being personally liable has the power, but not necessarily the right, to file an amendment to the articles, stating that such member will not be liable for any future debts, obligations and liabilities of the LLC, except with respect to persons that have reasonably relied upon the articles.
(3)(A) An amendment to the articles filed under subdivisions (f)(1) and (2) shall be effective immediately, except that such an amendment is not effective against persons reasonably relying upon the articles naming the member as individually liable for the debts, obligations and liabilities of the LLC, until the passage of ninety (90) days from the filing of the amendment to the articles.
(B) Notwithstanding subdivision (f)(3)(A), such member shall continue to be liable for all debts and obligations of the LLC incurred by the LLC during the time that the member was identified in the articles as being personally liable.
Acts 2005, ch. 286, § 1; 2020, ch. 604, § 4.
Tenn. Code Ann. § 48-249-115 Indemnification.
48-249-115. Indemnification.
(a) Definitions. As used in this section, unless the context otherwise requires:
(1) “Expenses” means, without limitation, counsel fees;
(2) “Liability” means the obligation to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses incurred with respect to a proceeding;
(3) “LLC” includes any domestic LLC and any domestic or foreign predecessor of an LLC in a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction;
(4)(A) “Official capacity” means:
(i) With respect to a director in a director-managed LLC, the position of director;
(ii) With respect to a manager in a manager-managed LLC, the position of manager;
(iii) With respect to a member in a member-managed LLC, a member who took an action of management as a member; and
(iv) With respect to a person in a capacity not described in subdivision (a)(4)(A)(i), (a)(4)(A)(ii) or (a)(4)(A)(iii), the elective or appointive office or position held by an officer, member of a committee of the board of directors or member of a committee of the managers or members or the employment or agency relationship undertaken by an employee or agent on behalf of the LLC; and
(B) “Official capacity” does not mean service for any other foreign or domestic entity;
(5) “Party” means an individual who was, is or is threatened to be made a named defendant or respondent in a proceeding;
(6) “Responsible person” means an individual who is or was a director of a director-managed LLC, a manager of a manager-managed LLC or a member of a member-managed LLC, or an individual who, while a director of a director-managed LLC, a manager of a manager-managed LLC, or a member of a member-managed LLC, is or was serving at the LLC's request as a director, manager, officer, partner, trustee, employee or agent of an employee benefit plan or any other foreign or domestic entity. For purposes of this subdivision (a)(6), a director of a director-managed LLC, a manager of a manager-managed LLC or a member of a member-managed LLC is considered to be serving an employee benefit plan at the LLC's request, if the director's, manager's or member's duties to the LLC also impose duties on, or otherwise involve services by, the director, manager or member to the plan or to participants in or beneficiaries of the plan. “Responsible person” includes, unless the context requires otherwise, the estate or personal representative of a responsible person; and
(7) “Special legal counsel” means counsel who has not represented the LLC or a related LLC, or a member, director, manager, member of a committee of the board of directors, member of a committee of the managers, member of a committee of the members, officer, agent or employee, whose indemnification is in issue.
(b) Authority to indemnify.
(1) Except as provided in subsection (d), an LLC may indemnify an individual made a party to a proceeding, because such individual is or was a responsible person against liability incurred in the proceeding, if the individual:
(A) Acted in good faith;
(B) Reasonably believed:
(i) In the case of conduct in such individual's official capacity with the LLC, that such individual's conduct was in the LLC's best interest; and
(ii) In all other cases, that such individual's conduct was at least not opposed to the LLC's best interests; and
(C) In the case of any criminal proceeding, had no reasonable cause to believe such individual's conduct was unlawful.
(2) A responsible person's conduct, with respect to an employee benefit plan for a purpose such person reasonably believed to be in the best interests of the participants in and beneficiaries of the plan, is conduct that satisfies the requirement of subdivision (b)(1)(B).
(3) The termination of a proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere, or its equivalent, is not, of itself, determinative that the responsible person did not meet the standard of conduct described in this section.
(4) Except as provided in subsection (e), an LLC may not indemnify a responsible person under this section:
(A) In connection with a proceeding by, or in the right of, the LLC in which the responsible person was adjudged liable to the LLC; or
(B) In connection with any other proceeding charging improper personal benefit to such responsible person, whether or not involving action in such person's official capacity, in which such person was adjudged liable on the basis that personal benefit was improperly received by such person.
(c) Mandatory indemnification. An LLC shall indemnify a responsible person who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the person was a party, because the person is or was a responsible person, against reasonable expenses incurred by the person in connection with the proceeding.
(d) Advances for expenses.
(1) An LLC may pay for or reimburse the reasonable expenses incurred by a responsible person who is a party to a proceeding, in advance of final disposition of the proceeding, if:
(A) The responsible person furnishes the LLC a written affirmation of good faith belief that such responsible person has met the standard of conduct described in subsection (b);
(B) The responsible person furnishes the LLC a written undertaking, executed personally or on such responsible person's behalf, to repay the advance, if it is ultimately determined that the responsible person is not entitled to indemnification; and
(C) A determination is made that the facts then known to those making the determination would not preclude indemnification under this section.
(2) The undertaking required by subdivision (d)(1)(B) shall be an unlimited general obligation of the responsible person, but need not be secured, and may be accepted without reference to financial ability to make repayment.
(3) Determinations and authorizations of payments under this section shall be made in the manner specified in subsection (f).
(e) Court ordered indemnification. A responsible person who is a party to a proceeding may apply for indemnification to the court conducting the proceeding, or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice the court considers necessary, may order indemnification, if it determines:
(1) The responsible person is entitled to mandatory indemnification under subsection (c), in which case the court shall also order the LLC to pay the responsible person's reasonable expenses incurred to obtain court ordered indemnification; or
(2) The responsible person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the responsible person met the standard of conduct set forth in subdivision (b)(1), or was adjudged liable as described in subdivision (b)(4). If the responsible person was adjudged so liable, the responsible person's indemnification is limited to reasonable expenses incurred.
(f) Determination and authorization of indemnification.
(1) Except as provided in subsection (e), an LLC may not indemnify a responsible person under subsection (b), unless authorized in the specific case, after a determination has been made that indemnification of the responsible person is permissible in the circumstances, because the responsible person has met the standard of conduct set forth in subdivision (b)(1).
(2) Such determination shall be made:
(A) By the board of directors of a director-managed LLC, by the managers of a manager-managed LLC, or by the members of a member-managed LLC, as applicable, by majority vote of a quorum consisting of directors, managers or members, as applicable, not at the time parties to the proceeding;
(B) If a quorum cannot be obtained under subdivision (f)(2)(A), by majority vote of a committee duly designated by the board of directors of a board-managed LLC, by the managers of a manager-managed LLC, or by the members of a member-managed LLC, as applicable, in which designation directors, managers or members, as applicable, who are parties may participate, consisting solely of two (2) or more directors, managers or members, as applicable, who are not at the time parties to the proceeding;
(C) By special legal counsel:
(i) Selected by the board of directors of a director-managed LLC, by the managers of a manager-managed LLC, or by the members of a member-managed LLC, as applicable, or by a committee in the manner prescribed in subdivision (f)(2)(A) or (f)(2)(B); or
(ii) If a quorum of the board of directors of a director-managed LLC, the managers of a manager-managed LLC, or the members of a member-managed LLC, as applicable, cannot be obtained under subdivision (f)(2)(A) and a committee cannot be designated under subdivision (f)(2)(B), selected by majority vote of the full board of directors of a director-managed LLC, by the managers of a manager-managed LLC, or by the members of a member-managed LLC, in which selection directors, managers or members, as applicable, who are parties to the proceeding may participate; or
(D) By a majority vote of the members of a director-managed LLC or a manager-managed LLC, but voting rights owned or controlled by members who are at the time parties to the proceeding may not be voted on the determination.
(3) Authorization of indemnification, and evaluation as to reasonableness of expenses, shall be made in the same manner as the determination that indemnification is permissible, except that, if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subdivision (f)(2)(C) to select counsel.
(g) Indemnification of officers, employees and agents.
(1) An officer of the LLC who is not a responsible person is entitled to mandatory indemnification under subsection (c), and is entitled to apply for court-ordered indemnification under subsection (e), in each case, to the same extent as a responsible person.
(2) The LLC may indemnify and advance expenses to an officer, employee, independent contractor or agent of the LLC who is not a responsible person, to the same extent as a responsible person.
(3) An LLC may also indemnify and advance expenses to an officer, employee, independent contractor or agent who is not a responsible person, to the extent, consistent with public policy, that may be provided by its LLC documents, by general or specific action of the board of directors of a director-managed LLC, by the managers of a manager-managed LLC, by the members of a member-managed LLC, or by contract.
(h) Insurance. An LLC may purchase and maintain insurance on behalf of a person who is or was a responsible person, officer, employee, independent contractor or agent of the LLC, or who, while a responsible person, officer, employee, independent contractor or agent of the LLC, is or was serving at the request of the LLC as a responsible person, officer, partner, trustee, employee, independent contractor or agent of an employee benefit plan or any other domestic or foreign entity, against liability asserted against or incurred by such person acting in that capacity, or arising from the person's status as a responsible person, officer, employee, independent contractor or agent, whether or not the LLC would have power to indemnify the person against the same liability under subsection (b), (c) or (g).
(i) Nonexclusivity.
(1) The indemnification and advancement of expenses, granted under or provided by this section, shall not be deemed exclusive of any other rights to which a responsible person seeking indemnification or advancement of expenses may be entitled, whether contained in this section, the LLC documents, or, when authorized by such LLC documents, action of the members, directors or managers or an agreement providing for such indemnification; provided, that no indemnification may be made to or on behalf of any responsible person, if a judgment, or other final adjudication adverse to the responsible person or officer, establishes such person's liability:
(A) For any breach of the duty of loyalty to the LLC or its members;
(B) For acts or omissions not in good faith, or that involve intentional misconduct or a knowing violation of law; or
(C) Under § 48-249-307.
(2) Nothing contained in this section shall affect any rights to indemnification to which the LLC's personnel, other than responsible persons, may be entitled by contract or otherwise under law. If the LLC documents limit indemnification or advances for expenses, indemnification and advances for expenses are valid only to the extent consistent with the LLC documents.
(3) This section does not limit an LLC's power to pay or reimburse expenses incurred by a responsible person, officer, employee, independent contractor or agent, in connection with such person's appearance as a witness in a proceeding, at a time when such person has not been made a named defendant or respondent to the proceeding.
Acts 2005, ch. 286, § 1.
Tenn. Code Ann. § 48-249-116 LLC as legal entity.
48-249-116. LLC as legal entity.
An LLC is a legal entity distinct from its members.
Acts 2005, ch. 286, § 1.
Source: Tennessee Code (state release 76 via Public.Resource.Org) + public chapters (Tennessee Secretary of State)URL: https://archive.org/download/gov.tn.tca/release76.2021.05.21/gov.tn.tca.title.48.htmlFetched: 10/24/2026